Here are the most notable moves by AI analysts this week.
Stifel upgrades Microsoft Group's rating to buy
This week, Stifel upgraded Microsoft Group's stock rating to buy from hold, and raised its price target to $575.00 from $530.00, expressing growing confidence in the company's ability to maintain its mid-to-high revenue growth levels of the second decade.
Analysts led by Brad Reback said Microsoft had clearly turned a corner following the results for the quarter ending in June, citing the continued rise in Azure service, a decline in investment intensity in big language model research, and an acceleration in OpenAI's contribution.
Stifel expects Azure to rise an additional 200-300 basis points as Microsoft achieves a more sustainable pace of efficiency across its entire ecosystem of chips, models, and software, supported by CFO Amy Hood’s disclosure that the company cut dock-to-live streaming uptime by more than 50% over the past year, helping to convert capacity into revenue more quickly.
Copilot's seat count reached approximately 30 million in the fourth quarter, an increase of 10 million seats compared to the previous quarter, while GitHub's shift to a consumption-based pricing model provides additional growth leverage. Analysts noted that these positive factors should offset the slowdown in seat growth as Microsoft 365 approaches 500 million seats, keeping growth at least at the mid-2000s level for several years.
Analysts confirmed that previous concerns about margin pressures were too negative, pointing to efficiency gains in Azure, the cancellation of revenue-sharing payments with OpenAI following the contract review in April, and the extension of asset productivity to 25 years instead of 15. Also, Microsoft's need to invest heavily in developing its own large language models is diminishing as open-weighted models deliver similar results at a lower cost.
Citibank: Buy stocks on the dip, AI trading continues
Citi maintains its overweight recommendation on US-led equities, indicating it will increase its exposure to equity markets if prices decline, even amid pressure from rising oil prices, rising interest rates, and weak seasonality on market sentiment.
The bank's strategists wrote in their September opinion: We are impressed by the resilience of the equity market in the face of higher oil prices, rising interest rates, and weak seasonality in September, even at a time of heightened US interest rate volatility. They noted that stocks typically decline after the first Federal Reserve rate hike, not before, and that markets also tend to weaken ahead of midterm elections before experiencing their usual year-end rally.
The strategists added: “We prefer the United States because we still believe the AI trade will continue,” noting that the US is better protected from further increases in oil prices. Emerging Asia, which was downgraded in early July, is Citi’s next choice when risk is added.
In bonds, Citi maintains a neutral stance on the timescale, leaning towards emerging markets and shorting European government bonds. The upcoming French elections add further European risks, while the bank has returned UK bonds to a neutral position. Strategists said: At this stage, it's unclear what will stop the Federal Reserve from its hawkish path.
Citi maintained an underweight position in US and European investment credit as a hedge against its overweight equity position. In commodities, it maintains a long position in base metals and a neutral position in energy, having recently reduced its long position in gold and returned emerging market currencies to a neutral stance amid rising US interest rate volatility.
Wall Street is optimistic about Meta as Muse AI emerges as a key growth driver
Wall Street analysts expressed widespread optimism about Meta following the Connect event, where the company made its artificial intelligence agent Muse the focus of its product and device plans.
Evercore ISI maintained its outperform rating and $860.00 price target, describing Meta as its top long-term investment idea. Analysts wrote, Muse instead of Metaverse is good for Meta investors, adding that Muse could prompt investors to value the stock at 25 to 30 times its 2028 earnings, potentially pushing the stock to $1,000.00 or more.
The mediator compared this moment to Alphabet's own transformation in the field of artificial intelligence: just as with GOOGL in 2025, what we are witnessing is a transition from 'AI loser' to 'AI winner'.
Analyst Josh Beck of Raymond James raised his price target to $860.00, based on 20 times 2028 earnings, citing Muse downloads exceeding 300,000 daily and a baseline scenario involving revenues exceeding $50 billion against annual costs of approximately $12 billion.
In the same vein, Lloyd Walmsley of Mizuho, which boasts a top-performing rating and a $750.00 price target, said that the Muse Charm—a keychain-like device expected to launch before the holiday season—could accelerate user growth. He wrote: “Meta’s AI product is gaining significant traction, though I’m more reserved about Meta’s new $1,299.00 VR headset due to its high price.”
Citi also maintained its buy rating and $800.00 price target, citing greater optimism about the stock following the event, while JPMorgan Chase & Co. indicated that Muse could become the most widely adopted consumer AI app since ChatGPT.
Citi raises its price target for Micron Technology to $1,300.00 and expects the stock to rise ahead of SEMICON West.
In a separate note, Citi raised its target price for Micron Technology shares to $1,300.00 from $1,150.00, anticipating a rise in the stock ahead of the SEMICON West conference and expecting the company to exceed expectations in its earnings and guidance announcement.
The bank raised its estimates for the August and November quarters on the back of better-than-expected DRAM prices, now modeling sales and earnings per share for the fiscal fourth quarter at $51 billion and $31.45, respectively, exceeding analysts' expectations. Citi analysts noted that Micron Technology's stock has had a significant up-and-down journey since its last earnings report, falling 35% from its previous highs and rebounding 34% from its July lows, pointing to Semiconductor West as the next catalyst.
At the conference, Citi expects equipment manufacturers to point to shortages of DRAM, MLCC, printed circuits, and optical components, potentially creating a bottleneck in the tools used to manufacture memory chips. These constraints could limit the growth of DRAM and NAND supply to the low 20s and help push memory prices higher next year, with both markets expected to remain tight amid strong AI-driven demand, and prices likely to peak in the second quarter of 2027.
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Citi assumes average selling prices for embedded DRAM will rise by 20% and 13% quarter-on-quarter in the current and following periods, with NAND rising by 34% and 15%, and expects that AI-driven demand for enterprise SSDs will offset the decline in consumer NAND.
Rosenblatt initiates coverage of Sandisk with a buy rating, saying AI is turning NAND into a vital infrastructure.
Also this week, Rosenblatt initiated coverage of SanDisk with a buy rating and a price target of $2,400.00, based on the fact that artificial intelligence is transforming NAND Flash memory from a commodity into a vital component of computing infrastructure.
Analyst Kevin Cassidy said that new AI computing platforms offer an opportunity to reposition NAND from a commodity storage medium to a more critical system component in AI infrastructure, given the increasing scale of models and intensive data inference that prioritizes density, performance, durability, and supply assurance over the lowest price.
Cassidy pointed to SanDisk’s BiCS8 and BiCS10 platforms, developed with manufacturing partner Kioxia over nearly 25 years, as drivers of this shift — improving density with fewer 3D layers than some competitors, thus sustaining a cost-performance advantage in AI-driven enterprise storage.
He added that new business model agreements with eight of the largest NAND customers, which could cover about 65% of fiscal year 2028 production, should improve demand visibility and reduce historical volatility in the sector.
The management framework for 2028-2030 calls for mid-to-high-level revenue growth in the second decade, a non-GAAP gross margin of approximately 80%, and an adjusted free cash flow margin of 50%. Cassidy conservatively estimates fiscal year 2030 non-GAAP earnings of approximately $300.00 per share.
Its $2,400.00 price target is based on a 10x estimate of fiscal year 2028 earnings, a multiple it described as conservative in light of growth prospects, taking into account execution risks and the possibility of NAND reverting to a commodity-cyclical pricing pattern.
